TIA Chides FMCSA for Overlooking Freight Fraud in Proposal
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The Transportation Intermediaries Association has voiced its displeasure with the Federal Motor Carrier Safety Administration over a proposal released by the agency which outlines possible revisions to record-keeping regulations for brokers, but which does not take aim at fraudsters who target the freight brokering industry.
The issue of freight fraud is one that incoming TIA CEO Chris Burroughs said is getting worse, and was among key TIA priorities he outlined during a call with media the day the FMCSA’s Notice of Proposed Rulemaking was released.
“The Transportation Intermediaries Association is deeply disappointed by the FMCSA’s decision to release a Notice of Proposed Rulemaking on broker transparency while failing to address the far more pressing issue of freight fraud, which costs the U.S. supply chain more than $1 billion annually,” the group said in a Nov. 19 statement. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains.”
The group noted that current broker transparency regulations are “rooted in the 1980s” and have no place in today’s “highly transparent marketplace.” It added, “Any attempts to expand or enhance these outdated provisions should be shelved, and the FMCSA should redirect its attention to fulfilling its primary mission — ensuring safety on our highways and addressing rampant freight fraud.”
Burroughs during a media call that morning noted that TIA had the just-released proposal under review, but stressed that the issue of freight fraud had worsened since the coronavirus pandemic and was in need of stiffer federal oversight.
Burroughs
“The COVID-19 pandemic hit, volumes went through the roof after the initial crunch, and these criminals basically found an industry where they could come in and take advantage of several loopholes and lax registration requirements from the Federal Motor Carrier Safety Administration, and it’s exploded into what it is now — a billion-dollar criminal enterprise,” said Burroughs, a 14-year TIA veteran who most recently served as the group’s vice president of government affairs. Burroughs is succeeding Anne Reinke, who became president and CEO of the Intermodal Association of North America.
Burroughs during the call noted that 2012 legislation which included provisions for addressing legacy challenges brokers face are obsolete in today’s environment. The bill he was referring to was a reauthorization of the Moving Ahead for Progress in the 21st Century Act, or MAP-21.
“Back in 2012, when President Obama signed that reauthorization into law, it was this more traditional double brokering,” Burroughs said. “That was really what we were looking to address in terms of the [so-called] fraudulent activity.” He noted that FMCSA by legal ruling has no enforcement authority over the advanced schemes that have emerged in the years since.
“Enforcement is obviously a huge issue,” Burroughs said. “The FMCSA pointed towards the 2019 administrative law judge ruling […] which barred them from assessing civil penalties for commercial violations, which dates back to that MAP-21 bill.” He added, “They point to this and say there’s nothing we can do. So, obviously, if a nefarious criminal actor knows that they can go into a bank and there’s no enforcement, there’s going to be no penalties for this, what would stop them from doing that, and the same thing is on the trucking side.”
Rep. Eleanor Holmes Norton and Rep. Mike Ezell introduced a bipartisan bill earlier this year aimed at fighting fraud involving residential moving companies. It would equip FMCSA with tools to protect consumers from scammers in the interstate transportation of household goods. The bill has been endorsed by several groups, including American Trucking Associations’ Moving & Storage Conference.
Meantime, Burroughs during the call stressed advocacy, coalition building and member engagement as top priorities as he takes the reins of the group.
“It’s truly the passion of the association that TIA be the voice of the third-party logistics industry on Capitol Hill with members of Congress, with their staff, with the federal agencies, with the administration,” Burroughs said. “We’re going to just look to continue to enhance what we’re doing on Capitol Hill to drive our advocacy efforts.”
He added, “We’re much more powerful as a unified voice to tackle these issues and continue to build up those relationships between shippers, brokers and carriers, and find situations where it’s a win for all of us.”
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